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Posted: 10/11/2004 10:54:55 AM EST
Link Posted: 10/11/2004 11:35:33 PM EST
Er . . . so?
Link Posted: 10/11/2004 11:50:16 PM EST
I dont know. Just that Kerry attempted tax avoision himself, while excoriating Bush for instituting tax cuts for the wealthy.

"An off-shore tax shelter
Documents obtained by the Globe detail John Kerry's 1983 investment of between $25,000 and $30,000 in offshore companies registered in the Cayman Islands. The document below, signed by Kerry, shows his pledge to purchase 2,470 shares of Peabody Commodities Trading Corp. through Sytel Traders, registered in the Caymans."



Drudge has linked to to the story today, so the hunt for details will be intense. Hard to say if there is any signficance to a 20 year old investment --or if it is even an investment--but if you know anything about Peabody Commodities or Sytel, drop me an e-mail at hugh@hughhewitt.com.

UPDATE:

A helpful e-mail:



Hugh:



Re your request for information on Peabody Commodities:



This was apparently a vehicle set up to do tax straddles involving futures. This was a common tax reduction/avoidance strategy in the late-70s and early-80s. It allowed someone with a capital gain to defer payment of capital gains taxes.

Here's how it worked. Someone with a capital gain would buy and sell futures contracts (e.g., in gold), where the futures contract bought had a different expiration month (e.g., April 84) than that of the futures contract sold (e.g., July 84). Since the price of the future bought was closely related to the price of the future sold (since they were on the same underlying commodity) the overall risk of the straddle position is low if one position realized a big risk the other typically realized a big loss of almost equal magnitude. That was the rationale of the strategy regardless of what way prices moved, one of the two contracts (one of the legs of the straddle) would show a loss, even though the overall risk of the position was low.



At the end of the year, the individual would liquidate the leg of the straddle showing a loss. Given the tax laws at the time, the loss could be used to offset a capital gain on some other investment. The winning position was carried into the next tax year, and was liquidated soon after the turn of the year. The tax on the gain associated with this position was paid in that (next) year. Hence, this was a strategy for deferring capital gains taxes. At the time, interest rates were pretty high, leading to a sizable benefit from tax deferral. When interest rates are 12 percent, I can effectively reduce my tax by about 12 percent if I can defer paying for a year.



This was considered a highly abusive tax avoidance scheme, and Congress revised the tax code (in 1984 I believe) to eliminate this sort of activity. The new rule is referred to as the straddle rule.



Hope this helps."

It does. It is a start. Conclusions?

Here's the link to the 2003 Globe story on the shelter.
Is Drudge's link commentary on the Club for Growth piece immediately atop it, or a signal that new details are on the way?

www.hughhewitt.com
Link Posted: 10/12/2004 5:05:57 AM EST
Why does Kerry need an off-sshore Cayman Island tax shelter, and why is he only paying 12 percent tax? I pay a lot more than that.

GunLvr
Link Posted: 10/12/2004 7:47:22 AM EST

Originally Posted By GunLvrPHD:
Why does Kerry need an off-sshore Cayman Island tax shelter, and why is he only paying 12 percent tax? I pay a lot more than that.

GunLvr



Well...duh

The off-shore tax shelter is WHY he is paying a lower rate than you.

That is the whole point.
Link Posted: 10/12/2004 9:26:33 AM EST

Originally Posted By Max_Mike:

Originally Posted By GunLvrPHD:
Why does Kerry need an off-sshore Cayman Island tax shelter, and why is he only paying 12 percent tax? I pay a lot more than that.

GunLvr



Well...duh

The off-shore tax shelter is WHY he is paying a lower rate than you.

That is the whole point.



Seems unfair to me.

GunLvr
Link Posted: 10/12/2004 9:45:35 AM EST
Unfair, just like Clinton deducting from his income taxes 3 bucks for each pair of used underwear donated to Goodwill or something like that.

In the last case it is more fraud than exploiting a loophole.
Link Posted: 10/12/2004 9:48:35 AM EST

Originally Posted By GunLvrPHD:
Why does Kerry need an off-sshore Cayman Island tax shelter, and why is he only paying 12 percent tax? I pay a lot more than that.

GunLvr



I saw that too on Fox. 12.8% actual tax rate. Amazing, yet you still hear people say the rich ought to get a tax cut like everyone else. Hell they have been getting their tax cuts for years and years through loopholes, deductions, write-off and hidden offshore accounts.

Didn't I also see that Bush paid 30.4%. Better than Kerry's numbers but I thought the upper tax bracket is 35%.
Link Posted: 10/12/2004 11:06:22 AM EST

Originally Posted By pogo:
Unfair, just like Clinton deducting from his income taxes 3 bucks for each pair of used underwear donated to Goodwill or something like that.

In the last case it is more fraud than exploiting a loophole.



He was deducting more like $5, and that was for briefs!
Link Posted: 10/12/2004 11:32:02 AM EST

Originally Posted By MikeS369:

Originally Posted By GunLvrPHD:
Why does Kerry need an off-sshore Cayman Island tax shelter, and why is he only paying 12 percent tax? I pay a lot more than that.

GunLvr



I saw that too on Fox. 12.8% actual tax rate. Amazing, yet you still hear people say the rich ought to get a tax cut like everyone else. Hell they have been getting their tax cuts for years and years through loopholes, deductions, write-off and hidden offshore accounts.

Didn't I also see that Bush paid 30.4%. Better than Kerry's numbers but I thought the upper tax bracket is 35%.



That's on *marginal* income. Total aggregate tax rate is lower.

And oh, btw, when they say the "rich", you realize a household with a married first year fireman and a first year elementary teacher falls into that bracket, right?

We only tax income, not wealth in the United States.
Link Posted: 10/12/2004 11:34:22 AM EST

Originally Posted By MikeS369:

I saw that too on Fox. 12.8% actual tax rate. Amazing, yet you still hear people say the rich ought to get a tax cut like everyone else. Hell they have been getting their tax cuts for years and years through loopholes, deductions, write-off and hidden offshore accounts.



The "rich" pay the overwhelming majority of taxes in this country. You sound like one of the brainwashed sheeple.
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